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United States Defense Committee and Patrick Reilly v. Federal Election Commission and William F. Smith

decided: November 7, 1988.


Appeal from a judgment of the United States District Court for the Northern District of New York, Con. G. Cholakis, Judge, that declared that communications proposed by the appellants were prohibited by the Federal Election Campaign Act, section 441b. Judgment vacated and remanded for dismissal for lack of ripeness.

Oakes and Altimari, Circuit Judges.*fn*

Author: Oakes

OAKES, Circuit Judge:

This case presents the question whether an advisory opinion rendered by an administrative agency is reviewable. The advisory opinions in this case were sought by the United States Defense Committee ("USDC") and Patrick Reilly. USDC is a non-profit corporation exempt from federal income tax under 26 U.S.C. § 501(c)(4) (1982) which lobbies on national defense and foreign policy issues. Its membership includes individuals, partnerships and corporations, including business corporations, which contribute to USDC's treasury. Patrick Reilly is a member of the USDC Board of Directors who resides in the Northern District of New York. The agency involved is the Federal Election Commission ("FEC"), which administers and enforces the Federal Election Campaign Act of 1971, as amended, codified at 2 U.S.C. §§ 431-455 (1982) ("FECA" or the "Act"). The FEC also administers the Presidential Election Campaign Fund Act, 26 U.S.C. §§ 9001-9013 (1982 & Supp. IV 1986) ("Fund Act"), and the Presidential Primary Matching Payment Account Act, 26 U.S.C. §§ 9031-9042 (1982) ("Matching Payment Act").

The advisory opinions that were sought by USDC and Reilly relate to two draft letters which discuss candidates' views on defense issues. USDC proposed to issue these letters using funds from its corporate treasury, including funds furnished by business corporations which are prohibited from engaging in certain election activities by section 441b of FECA. The United States District Court for the Northern District of New York, Con. G. Cholakis, Judge, held that it had jurisdiction to entertain the case, contrary to the FEC's assertion. But the district court did hold for the FEC on the merits, declaring that USDC's proposed communications were prohibited by FECA section 441b, and that USDC did not qualify for the exemption from section 441b established in FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, 93 L. Ed. 2d 539, 107 S. Ct. 616 (1986). Because we do not think that the complaint presented claims ripe for court adjudication, the judgment of the district court is vacated and the case is remanded with instructions to dismiss the complaint.


The two draft letters prepared by USDC, which discuss some imaginary candidates' answers to a questionnaire about future defense issues, are set forth in the margin.*fn1 These letters were among several proposed activities that USDC put before the Commission on October 13, 1983, in a request for an advisory opinion pursuant to 2 U.S.C. § 437f(a)(1).*fn2 In this request, USDC proposed to use funds from its corporate treasury to publish and distribute information about candidates just before primary or general elections. This information included the number of times and the specific ways in which the candidates' responses comported with USDC's views. USDC also proposed to disseminate the voting records of members of Congress on legislation of interest to USDC. The Commission responded in Advisory Opinion ("AO") 1983-43, 1 Fed. Election Camp. Fin. Guide (CCH) para. 5746 (Jan. 26, 1984), concluding that USDC's financing of some of the proposed activities would be prohibited by section 441b.

On March 28, 1984, USDC filed this lawsuit to challenge the validity of the advisory opinion on statutory and constitutional grounds. USDC asked the district court to certify constitutional questions to the court of appeals sitting en banc pursuant to the unique provisions of 2 U.S.C. § 437h(a). Meanwhile, the Commission amended its regulations, and USDC obtained a second advisory opinion, AO 1984-14, 1 Fed. Election Camp. Fin. Guide (CCH) para. 5761 (May 25, 1984), in which the Commission reiterated its earlier determination. After the second advisory opinion, USDC amended its complaint but retained its request that the district court certify questions to the en banc court pursuant to section 437h(a). The Commission moved to dismiss the complaint, and USDC moved again for certification. The district court never ruled on USDC's and the FEC's motions, but took them under advisement.

On January 22, 1987, USDC requested a third advisory opinion in light of the Supreme Court's decision in FEC v. Massachusetts Citizens for Life, Inc., supra. In response, the Commission issued AO 1987-7, 1 Fed. Election Camp. Fin. Guide (CCH) para. 5889 (Apr. 6, 1987), which superseded the previous two opinions. This opinion concluded that Massachusetts Citizens for Life did not apply to USDC's case because USDC, unlike MCFL, accepts contributions from business corporations. The Commission did not issue an advisory opinion on USDC's proposed publication of incumbents' voting records because it lacked the affirmative vote of four members required under 2 U.S.C. § 437c(c).*fn3 As for the proposed dissemination of candidate responses to USDC questionnaires, the Commission declined to comment on newspaper advertising since no "specific factual description of this activity was provided." AO 1987-7, at n.1. However, it determined that the two draft letters, note 1 supra, were not exempt under the regulations, 11 C.F.R. § 114.4(b)(5), and therefore violated section 441b in view of their proximity to the election and their advocacy of specific candidates.

After the third advisory opinion, USDC again amended its complaint and challenged only the Commission's conclusion in AO 1987-7 that distribution of the two draft letters could not be financed from USDC's corporate treasury. In this amended complaint, USDC also abandoned its request for certification of constitutional questions to the en banc court pursuant to section 437h. Instead, it requested declaratory and injunctive relief directly from the district court. That court, as we have said, found that it had jurisdiction, but held for the Commission on the merits.


On appeal the Commission renews its argument that the district court lacked jurisdiction. While we believe that the district court did have jurisdiction, we think that the Commission's arguments concerning jurisdiction do go to ripeness. We will therefore set forth the assertions made. To do so, however, we must first detail the Act's administrative scheme.

FECA, together with the Fund Act and the Matching Payment Act, limit federal election campaign contributions and expenditures, require extensive disclosure and provide for public funding of presidential campaigns. The Commission administers the three acts and formulates policy that concerns them. It has six voting members, no more than three of whom may be affiliated with the same political party, 2 U.S.C. § 437c(a)(1), and, as we have said, the affirmative vote of four members of the Commission is required for any formal agency action, section 437c(c), note 3 supra. The Commission has broad duties as administrator. See, e.g., 2 U.S.C. § 438(a), (b). It also has "exclusive jurisdiction with respect to the civil enforcement" of the Act, 2 U.S.C. § 437c(b)(1), and there is an elaborate administrative process for such civil enforcement. Under section 437g and the Commission regulations, 11 C.F.R. Pt. 111, upon receipt of a sworn administrative complaint alleging violations, the Commission is to notify the object of the complaint and that person has fifteen days to demonstrate in writing that no action should be taken. 2 U.S.C. § 437g(a)(1), 11 C.F.R. §§ 111.5, 111.6. If the Commission finds "reason to believe" that a violation has occurred, the respondent is notified under 2 U.S.C. § 437g(a)(2), 11 C.F.R. § 111.9(a), and may submit a legal and factual response to the "reason to believe" finding. The statute then provides for an investigation. 2 U.S.C. § 437g(a)(2). A respondent may initiate discussions towards resolving the matter through conciliation. 11 C.F.R. § 111.18(d). After the investigation is completed, the General Counsel must forward to the respondent a brief on the issues involved and the respondent may reply. 2 U.S.C. § 437g(a)(3), 11 C.F.R. § 111.16. The Commission then determines whether there is "probable cause to believe" that a violation has occurred. 2 U.S.C. § 437g(a)(4)(A)(i). If so, the Commission must "attempt . . . to correct or prevent such violation by informal methods of conference, conciliation, and persuasion, and to enter into a conciliation agreement." Id. If conciliation efforts are unavailing, the Commission's only recourse is to bring a civil suit in district court. 2 U.S.C. § 437g(a)(6)(A).

The Commission argues that the district court lacks jurisdiction over this lawsuit because Congress provided for judicial review of issues concerning the Act's application only after they are first channeled through the administrative process described above, which was designed in part to ensure that sufficient efforts are made to resolve issues without litigation. The Commission says that Congress did not intend to permit organizations that wanted to bypass the statute's detailed administrative and judicial review provisions to obtain advance judicial approval of every particular letter that they might want to distribute. In Bread Political Action Committee v. FEC, 455 U.S. 577, 71 L. Ed. 2d 432, 102 S. Ct. 1235 (1982), a case involving a statutory question of who may challenge the constitutionality of FECA in specially expedited suits, the Court said that "plaintiffs meeting the usual standing requirements can challenge provisions of [FECA] under the federal-question jurisdiction granted the federal courts by 28 U.S.C. § 1331 (1976 ed., Supp. ...

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